Cenvat on input services

This query is : Resolved

Leni James K (Querist)
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26 November 2012
Please clarify the below doubt:

We are a manufacturing company and are having construction activities going on in our factory. We have given the construction activity going on in our factory to a contractor who is billing us under works contract service scheme. Now once the bill is issued can we claim the cenvat on input services(works contract service-50% charged in bill) on the basis of the bill. Also please advise whether we have to ensure that the 50% service tax shown and charged in the bill has been paid by the works contractor to government and if so within what time limits such amount has to be paid to Govt by the works contractor for us to claim the cenvat.

Leni James

Pradeep Nainawati

Pradeep Nainawati (Expert)
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27 November 2012 You can avail the cenvat credit (50% of total ST)on receipt of invoice. But make sure that you make payment to service provider within 3 months from the date mentioned on invoice. If you fail to do so then you have to reverse the amount of cenvat credit availed and after making payment to service provider you can claim it.

Its not your responsibility to ensure that the payment made by you to service provider is deposited by him to government.

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